Why is there a combined tax relief cap for cash top-ups to the Special/Retirement Account and MediSave Account from 1 January 2022?
The combined tax relief for cash top-ups to the Special/Retirement Account and MediSave Account was introduced for greater consistency across CPF schemes. This allows members to better understand and take action to benefit from these schemes. The tax relief eligibility conditions for cash top-ups made before 1 January 2022 had differed1 for top-ups to retirement savings and top-ups to MediSave Account for employees. With this change2, the tax relief eligibility conditions for cash top-ups made on or after 1 January 2022 across both schemes were aligned.
1. Before 1 January 2022, the tax relief eligibility conditions for cash top-ups differed between both schemes in terms of (i) tax beneficiary [giver for Retirement Sum Topping-Up (RSTU); recipient for Voluntary Contribution to MediSave Account (VCMA)]; and (ii) tax relief cap for top-ups to self/loved ones (capped at $7k/$7k for RSTU, tax relief cap for VC-MA depended on both the Basic Healthcare Sum and the amount of mandatory CPF contributions for the year).
2. The changes related to cash top-ups to MediSave Account do not apply to MediSave contributions made in the capacity of a self-employed person (SEP). If you would like to make MediSave contributions in the capacity of a SEP, visit the Self-Employed Scheme page for more information on topping up your MediSave Account.